I REFER to the letter, 'No subsidy in new HDB flats, just a discount' (ST, Nov 25), by Mr Cheong Chee Mun.
Mr Cheong said that HDB acquires land for public housing at 'very low cost'. This is not correct. The land for public housing is purchased from the Singapore Land Authority at market value, based on the Chief Valuer's assessment.
The total cost of developing four- and five-room flats is higher than the example of $200,000 mentioned in the letter. The development cost is even higher in mature HDB estates where the market valuation of the land is higher. Hence, the assumption that HDB enjoys a profit of $150,000 per flat is wrong.
HDB has consistently incurred losses in the development and sale of new flats. It is unable to fully recover the costs of development as it sells new flats at a subsidised price. Together with the other types of housing subsidy, such as the CPF Housing Grant and the Additional CPF Housing Grant for lower-income families, the sale of subsidised new flats results in a tangible and substantive cost to the Government. Specifically, over the last five years, HDB's home-ownership programme incurred an average annual deficit of $390 million.
Kee Lay Cheng (Ms)
Deputy Director
(Marketing & Projects)
For Director (Estate Administration & Property)
Housing & Development Board
